Correlation Between FuelCell Energy and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and China BlueChemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FuelCell Energy and China BlueChemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and China BlueChemical, you can compare the effects of market volatilities on FuelCell Energy and China BlueChemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FuelCell Energy with a short position of China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and China BlueChemical.
Diversification Opportunities for FuelCell Energy and China BlueChemical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FuelCell and China is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical and FuelCell Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FuelCell Energy are associated (or correlated) with China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and China BlueChemical go up and down completely randomly.
Pair Corralation between FuelCell Energy and China BlueChemical
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 3.16 times more return on investment than China BlueChemical. However, FuelCell Energy is 3.16 times more volatile than China BlueChemical. It trades about 0.08 of its potential returns per unit of risk. China BlueChemical is currently generating about 0.05 per unit of risk. If you would invest 949.00 in FuelCell Energy on October 21, 2024 and sell it today you would earn a total of 181.00 from holding FuelCell Energy or generate 19.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 90.16% |
Values | Daily Returns |
FuelCell Energy vs. China BlueChemical
Performance |
Timeline |
FuelCell Energy |
China BlueChemical |
FuelCell Energy and China BlueChemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FuelCell Energy and China BlueChemical
The main advantage of trading using opposite FuelCell Energy and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, China BlueChemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China BlueChemical will offset losses from the drop in China BlueChemical's long position.FuelCell Energy vs. Fevertree Drinks PLC | ||
FuelCell Energy vs. SALESFORCE INC CDR | ||
FuelCell Energy vs. Molson Coors Beverage | ||
FuelCell Energy vs. AUTO TRADER ADR |
China BlueChemical vs. Aristocrat Leisure Limited | ||
China BlueChemical vs. PLAYMATES TOYS | ||
China BlueChemical vs. GAMING FAC SA | ||
China BlueChemical vs. MOVIE GAMES SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |